Geneva, 10 April 2008

This presentation was prepared by EIF. The information included in this presentation is based on figures available for end March 2008. Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.

Gen

eva,

10

Ap

ril 2

00

8

UN ECONOMIC COMMISSION FOR EUROPE

REGION

Patrice LIAUZU

The role of a EU financial institution

in support of innovation

2 / 18

Table of contents

EIF at a glance

An active role in European Venture Capital

New strategic developments

Tech Transfer

Fund of Funds

Clean Tech

JEREMIE (Cohesion Policy)

Conclusions / Next Steps

3 / 18

EIF at a glance

Support to EU ObjectivesGenerate an appropriate return

EU specialised financial institution for SMEs, acting through: Venture Capital (fund-of-funds),Guarantees for SME portfolios and financial engineering

AAA (Standard & Poor’s)Aaa (Moody’s)AAA (Fitch)

MDB status 0% weighting

Subscribed capital: EUR 3bn EIB: 66 %EU: 25 %Fin. institutions: 9 %

1. EIF at a glance

2. An active role in European Venture Capital

3. New strategic developments

a. Tech Transfer

b. Fund of Funds

c. Clean Tech

d. JEREMIE (Cohesion Policy)

4. Conclusions / Next Steps

EU 27, EFTA, Candidate countries

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Under management at endFebruary 2008

Total

signatures

New signatur

es in 2007

New signatures in 2008

Vehicles

VENTURE

CAPITALEUR 4.4bn

EUR 0.5bn

EUR 277

funds

GUARANTEES

EUR 11.6bn

EUR 1.4bn

EUR 14m189

operat.

TOTAL EUR 16bn EUR

1.9bnEUR

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



5 / 18

The PE/VC market covered by EIF

TechTransfer/Incubators

BusinessAngelsSide Funds,Pre-Seed

SeedStage

EarlyStage

ExpansionDevelop-mentCapital

MidStage

Later-stageBuy-out

StockExchange/PublicEquity

VENTURE CAPITAL PRIVATE EQUITY

EIF INVESTMENT FOCUS

1. EIF at a glance

2. An active role in European

Venture Capital


a. Tech Transfer

b. Fund of Funds

c. Clean Tech



6 / 18

Venture portfolio overview

■ Balance portfolio between expansion capital and start-up-/early-stage

■ Portfolio biased towards technology (59% in ICT & life sciences)

■ Around 30% of portfolio in multi-country funds

Italy 7%

UK 15%

Spain 8%

Germany 7%

France 13%

Central and Eastern

Europe 5% Rest of Western

Europe 13%

Multi-country 32%

Geographic spread

1. EIF at a glance


Venture Capital


a. Tech Transfer

b. Fund of Funds

c. Clean Tech



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Primary Fund of Funds investor Focused on technology Largest European early-stage investor

(15% market share) Specialist in new teams Need to enhance this role in support of

innovation Lead operator in New Products

Business Angels side funds Technology Transfer investor Clean Technologies EU / periphery emerging market Fund of

Funds “JEREMIE” Advisory Services

Activities covered by the EIF

1. EIF at a glance


Venture Capital


a. Tech Transfer

b. Fund of Funds

c. Clean Tech



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New Strategic Developments

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



9 / 18

Several deals concluded in Europe (United kingdom, Sweden, Belgium) Links with major European research centres

Technology Transfer

Provider of innovative solutions to VC constraints

R&D Tech Transfer / proof-of-concept Marketable product

Licensing Special Protection Vehicles«Spin-off» Special Protection Vehicles

«Hybrid» Special-Purpose Vehicles

Virtual LABCreated by leading R&DCentres

Potential exits for the

SPV projects

Licensing to corporation

Sale to corporation

Purchase / investment by other investors

IPO

«Technology» Intellectual Property

«Prototype» Intellectual Property

Funding gap

Investment focus of EIF

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



10 / 18

EIF’s approach to investing in technology transfer is flexible, allowing to address very different situations

Focus on research organisations which are leaders in their respective fields and act in an entrepreneurial environment (United Kingdom, Sweden, Belgium)

Accelerate process through framework agreements (covering issues such as company valuations, shareholder structure,…) – avoid reinventing the wheel for each deal

EIF believes in contributing to ecosystems: great complementarities with VCs but also BAs

Investments made on commercial terms

EIF's Tech Transfer improves the commercialisation of research

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



11 / 18

Experienced Advisor of Tailor-made Programmes

European Investment Fund has designed and is advisor to several dedicated investment programmes throughout Europe. EX: ERP-EIF Dachfonds

EUR 500 million dedicated Fund of Funds for Germany

Investors: German Government, European Investment Fund

Rationale: in 2005 risk capital was underdeveloped in Germany (0.12% cf. average EU level 0.4%)

Focus: Early development stage VC funds focus on Germany

Dahlia Partners

EUR 300 million dedicated Pan European mid-market buyout Fund of Funds, co-investment and secondaries

Investors: Natixis, European Investment Fund

Rationale: pension reform in France and mid-market opportunities in Europe

Focus: Mid-market buyouts

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



12 / 18

Experienced Advisor of Tailor-made Programmes

Other Funds of Funds to be set up in cooperation with national investors Spain : NEOTEC

Turkey : IVCI

Portugal PVCI

Role in development of the VC market

EIF as investor / advisor

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



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Central role played by technological innovation in addressing global warming

Focus on areas of clean technologies and services including, energy storage and conversation, emission reduction, renewable energy

Sector that is currently lacking sufficient quality VC funds with specific 'eco-innovation' focus and the critical size necessary to implement such a focus

EIF playing a key role in building a financially viable market segment with interests closely aligned with EU priorities

EIF has recently invested in two fully dedicated Clean Tech funds

Clean Technology

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



14 / 18

GEEREF

■ Global Private Equity Fund of Funds Investing in specialised Regional Funds for renewable energy and energy efficiency

■ Developing countries and economies in transition;

■ Target Projects: Small and Medium Sized Energy Projects (up to EUR 10m)

■ Provide Risk capital + Technical assistance to Funds

■ Profit subordination - leverage private funds

■ Luxembourg-based Investment Fund and Public-Private Partnership, managed by EIF

■ Initial funding: EUR 120m

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



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JEREMIE is a joint initiative of the European Union (DG Regio + EIB-Group) launched in October 2005

Use structural funding for enhancing the Access to Finance to SMEs in Regional Development areas through sustainable and « revolving » financial instruments , including for VC : Transform grants into financial instrument by using “Holding Funds”

Enhance flexible management of financial engineering/adaptation to regional/national needs

Create leverage EIF potential Holding Manager on behalf of

Member States or Regions JEREMIE is an option for each country

JEREMIE: increasing the deploymentof self-sustaining financial instruments for SMEs

Need to move away from “grant dependency”

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



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JEREMIE Phases

Venture

CapitalFunds

2006 2007 - 2013

IMPLEMENTATION OF HOLDING FUNDS

DISBURSEMENT PROCESS

MicrofinanceProviders

(MCPs)

Tech TransferActivities

Guarantee schemes

Transforming parts of the ERDF grantsinto financial products for SME

SMESMEs

SMESMEs

SMESMEs

SMESMEs

SMESMEs

EVALUATION PHASE

Etc …

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



17 / 18

Holding Fund Case Study – Leverage at Holding Fund level?

Investment Board

Investment Board

Structural Funds

ERDF (& ESF)

Holding Fund (« HF »)Holding Fund (« HF »)

National Contributio

n

National Contributio

n

€ €

Possible EIB Loan

Possible EIB Loan

€

50% Contribution by way of ‘donation’

50% National Contribution

Up to + 50% additional capital by way of loan to

Holding Fund Vehicle (with or without State

guarantee). Conditional upon Business plan, due diligence and quality of

HF Manager

Financial intermediarie

s

Financial intermediarie

s

SMEs Microfinancebeneficiaries

€ € € €

€€€€

Possible Private Market

Equity

€

Banks and/or Pensions Funds to be approached to

join as Equity Partners in Fund

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EIF to continue acting as operational platform in support of innovation Reactivity Adaptability

Potential developments : mezzanine, increase Tech Transfer

Advisory Services? Hybrid Products? In close cooperation with EIB/European

Commission (EU Small Business Act mid 2008)

Conclusions / Next steps

1. EIF at a glance



a. Tech Transfer

b. Fund of Funds

c. Clean Tech



19 / 18

Contact

European Investment Fund

JEREMIE43, avenue J. F. Kennedy L-2968 Luxembourg

Patrice LiauzuEIF Brussels OfficeTel.: (0032 2) 2 35 00 71

Tel.: (+352) 42 66 88 212Fax: (+352) 42 66 88 280 www.eif.org/jeremie

Documents

Geneva, 10 April 2008